- Fourth Quarter GAAP Diluted EPS of $0.84 and
Non-GAAP Diluted EPS of $1.05
- Cabela’s CLUB® Avg. Receivables Grew
13.3%
- Consolidated Retail Comparable Store Sales
Decreased 6.5% on a Shift-Adjusted Calendar Basis
- Solid Cabela’s CLUB Performance, Despite
$15.8 Million Increase in Loan Loss Reserve vs. $9.9 Million LY
- Fourth Quarter Effective Tax Rate Increased
to 44.9% as Compared to 36.1% a Year Ago Primarily Due to Certain
Acquisition Costs, Shift in Source of Income, and State Income
Taxes
Cabela’s Incorporated (NYSE:CAB) today reported financial
results for the fourth quarter and fiscal year ended December 31,
2016. As previously disclosed, the Company’s fourth fiscal quarter
and fiscal year ended December 31, 2016, included 13 weeks and 52
weeks, respectively, while its fourth fiscal quarter and fiscal
year ended January 2, 2016, included 14 weeks and 53 weeks,
respectively.
For the quarter, on a GAAP basis, total revenue decreased 4.9%
to $1.3 billion, revenue from retail store sales decreased 4.3% to
$888.2 million, Internet and catalog sales decreased 12.4% to
$307.8 million, and Financial Services revenue increased 1.2% to
$132.7 million. For the quarter, adjusted for the shift in weeks,
U.S. comparable store sales decreased 6.4% and consolidated
comparable store sales decreased 6.5%. Adjusted for the 53rd week
in the fourth quarter of 2015, total revenue increased 1.0%, retail
store sales increased 4.9%, and Internet and catalog sales
decreased 4.7%. See the supporting schedules to this earnings
release labeled “Revenue in Fiscal Year 2016 (52 Weeks) Compared to
Fiscal Year 2015 (53 Weeks)” for a reconciliation of the GAAP to
non-GAAP financial measures.
For the quarter, net income decreased 26.3% to $58.1 million
compared to $78.8 million in the year ago quarter, and earnings per
diluted share were $0.84 compared to $1.14 in the year ago quarter.
Adjusted for certain items, the Company reported fourth quarter net
income of $72.5 million and earnings per diluted share of $1.05 as
compared to net income of $86.8 million and earnings per diluted
share of $1.26 in the year ago quarter. Fourth quarter 2016 GAAP
results included impairment and restructuring charges and other
items totaling a $0.21 reduction in earnings per diluted share. See
the supporting schedules to this earnings release labeled
“Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial
Measures” for a reconciliation of the GAAP to non-GAAP financial
measures.
For fiscal 2016, net income decreased 22.4% to $146.9 million
compared to $189.3 million, and earnings per diluted share were
$2.13 compared to $2.67 a year ago. Adjusted for certain items, the
Company reported fiscal 2016 net income of $179.7 million and
earnings per diluted share of $2.60 as compared to net income of
$204.7 million and earnings per diluted share of $2.88 a year ago.
Fiscal 2016 GAAP results included impairment and restructuring
charges and other items totaling a $0.47 reduction in earnings per
diluted share. See the supporting schedules to this earnings
release labeled “Reconciliation of GAAP Reported to Non-GAAP
Adjusted Financial Measures” for a reconciliation of the GAAP to
non-GAAP financial measures.
“We were clearly disappointed with the fourth quarter results,”
said Tommy Millner, Cabela’s Chief Executive Officer. “Consistent
with other retailers, we experienced challenging traffic patterns
in the quarter. Our increase in average ticket was not enough to
make up for a decrease in transactions. Similar to industry trends,
we experienced strength in firearms and shooting-related categories
primarily early in the quarter. Later in the quarter, firearms and
shooting-related categories became challenging as we faced the
headwind of lapping the impact that the San Bernardino tragedy had
on these categories a year ago. We saw improved trends in apparel
and other softgoods categories in the latter part of the quarter.
We continue to be pleased with the performance and growth of our
Cabela’s CLUB Visa program.”
For the quarter, consolidated comparable store sales decreased
6.5% and U.S. comparable store sales decreased 6.4% as compared to
the same quarter a year ago. Comparable store sales strength in
firearms and shooting-related categories through the first half of
the quarter was more than offset by softness in these categories
due to challenging comparisons from the year ago period.
Merchandise gross margin decreased by 118 basis points in the
quarter to 32.2% compared to 33.3% in the same quarter a year ago.
This decrease was primarily attributable to the impacts of
merchandise mix, promotional activity, and efforts to right size
inventory levels. The negative impact of merchandise mix was
attributable to the first two months of the quarter with increased
firearms and shooting-related category penetration and decreased
penetration in apparel categories. This negative impact was
slightly offset in the month of December with lower penetration of
firearms and shooting-related categories and higher penetration of
apparel categories. The overall merchandise mix impact was
approximately 70 basis points of the overall decrease for the
quarter. Promotional activity was responsible for approximately 30
basis points of the decrease and efforts to right size inventory
levels were responsible for approximately 20 basis points of the
overall decrease.
Expense management initiatives continued to generate meaningful
contributions to profitability. For the quarter, GAAP basis
SD&A expenses as a percentage of total revenue increased 10
basis points to 29.8% as compared to 29.7% in the same quarter a
year ago. On a non-GAAP basis SD&A expenses as a percentage of
total revenue decreased 20 basis points to 29.3% as compared to
29.5% in the same quarter a year ago.
“We continue to be very pleased with the results of our expense
and process improvement initiatives, which have continued to make
meaningful contributions to profitability,” Millner said. “It is
important to note that non-GAAP fourth quarter results reflect
expense leverage for the fifth consecutive quarter. These efforts
span across the entire organization, and I commend our teams for
executing the implementation of these profitability enhancing
improvements throughout the business.”
Cabela’s CLUB had an excellent quarter despite an increase in
the loan loss reserve. The reserve for loan losses increased by
$15.8 million in the quarter due to higher delinquency rates and,
to a lesser extent, an increase in credit card loan balances. For
the quarter, growth in the average number of active credit card
accounts was 4.2% and growth in average balance per active credit
card account was 8.7% as compared to the same period a year ago.
The average balance of credit card loans grew 13.3% to
approximately $5.4 billion as compared to $4.8 billion in the year
ago quarter. For the quarter, net charge-offs were 2.79%. Fourth
quarter Financial Services revenue increased 1.2% over the year ago
quarter. This increase was primarily driven by increases in
interest and fee income, which was largely offset by increases in
the provision for loan losses as well as interest expense.
The fourth quarter effective tax rate was 44.9% compared to
36.1% in the same quarter a year ago on a GAAP basis and 39.5%
compared to 36.1% on a non-GAAP basis. Our effective tax rate
increased comparing the respective periods primarily due to
increases in nondeductible expenses to facilitate the acquisition
of the Company ($5 million net impact to the provision for income
taxes), tax adjustments attributable to changes in the mix of
taxable income between the United States and foreign tax
jurisdictions, and state income taxes.
As a reminder, Cabela’s will not host a conference call with
analysts and investors or provide guidance in connection with the
results and does not plan to do so for future quarters while the
acquisition of the Company by Bass Pro Shops is pending.
About Cabela’s Incorporated
Cabela’s Incorporated, headquartered in Sidney, Nebraska, is a
leading specialty omni-channel retailer of hunting, fishing,
camping, shooting sports, and related outdoor merchandise. Since
the Company’s founding in 1961, Cabela’s® has grown to become one
of the most well-known outdoor recreation brands in the world, and
has long been recognized as the World’s Foremost Outfitter®.
Cabela’s offers a wide and distinctive selection of high-quality
outdoor products at competitive prices while providing superior
customer service. Cabela’s also issues the Cabela’s CLUB® Visa
credit card, which serves as its primary customer loyalty rewards
program. Cabela’s stock is traded on the New York Stock Exchange
under the symbol “CAB”.
Caution Concerning Forward-Looking
Statements
This press release contains “forward-looking statements” that
are based on the Company’s beliefs, assumptions, and expectations
of future events, taking into account the information currently
available to the Company. All statements other than statements of
current or historical fact contained in this press release are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act. The words “believe,” “may,”
“should,” “anticipate,” “estimate,” “expect,” “intend,”
“objective,” “seek,” “plan,” “confident,” and similar statements
are intended to identify forward-looking statements.
Forward-looking statements involve risks and uncertainties that may
cause the Company’s actual results, performance, or financial
condition to differ materially from the expectations of future
results, performance, or financial condition that the Company
expresses or implies in any forward-looking statements. These risks
and uncertainties include, but are not limited to: the satisfaction
of the conditions precedent to the consummation of the proposed
merger by and among Bass Pro Group, LLC, Prairie Merger Sub, Inc.,
a wholly owned subsidiary of Bass Pro Group, LLC, and the Company,
including, without limitation, the receipt of stockholder and
regulatory approvals, including as a result of the inability of
Capital One, National Association, to timely obtain regulatory
approvals for its consummation of its purchase of World’s Foremost
Bank; unanticipated difficulties or expenditures relating to the
proposed merger; legal proceedings, judgments, or settlements,
including those that may be instituted against the Company, the
Company’s board of directors, executive officers, and others
following the announcement of the proposed merger; disruptions of
current plans and operations caused by the announcement and
pendency of the proposed merger; potential difficulties in employee
retention due to the announcement and pendency of the proposed
merger; and the response of customers, suppliers, business
partners, and regulators to the announcement of the proposed
merger; the state of the economy and the level of discretionary
consumer spending, including changes in consumer preferences,
demand for firearms and ammunition, and demographic trends; adverse
changes in the capital and credit markets or the availability of
capital and credit; the Company’s ability to successfully execute
its omni-channel strategy; increasing competition in the outdoor
sporting goods industry and for credit card products and reward
programs; the cost of the Company’s products, including increases
in fuel prices; the availability of the Company’s products due to
political or financial instability in countries where the goods the
Company sells are manufactured; supply and delivery shortages or
interruptions, and other interruptions or disruptions to the
Company’s systems, processes, or controls, caused by system changes
or other factors; increased or adverse government regulations,
including regulations relating to firearms and ammunition; the
Company’s ability to protect its brand, intellectual property, and
reputation; the Company’s ability to prevent cybersecurity breaches
and mitigate cybersecurity risks; the outcome of litigation,
administrative, and/or regulatory matters (including the ongoing
audits by tax authorities and compliance examinations by the
Federal Deposit Insurance Corporation); the Company’s ability to
manage credit, liquidity, interest rate, operational, legal,
regulatory capital, and compliance risks; the Company’s ability to
increase credit card receivables while managing credit quality; the
Company’s ability to securitize its credit card receivables at
acceptable rates or access the deposits market at acceptable rates;
the impact of legislation, regulation, and supervisory regulatory
actions in the financial services industry; and other risks,
relevant factors, and uncertainties identified in the Company’s
filings with the SEC (including the information set forth in the
“Risk Factors” section of the Company’s Form 10-K for the fiscal
year ended January 2, 2016, Forms 10-Q for the quarterly periods
ended April 2, 2016, and October 1, 2016, and subsequent filings),
which filings are available at the Company’s website at
www.cabelas.com and the SEC’s website at www.sec.gov. Given the
risks and uncertainties surrounding forward-looking statements, you
should not place undue reliance on these statements. The Company’s
forward-looking statements speak only as of the date they are made.
Other than as required by law, the Company undertakes no obligation
to update or revise forward-looking statements, whether as a result
of new information, future events, or otherwise.
CABELA’S INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands
Except Earnings Per Share) (Unaudited)
Three Months Ended Fiscal Year Ended
December 31, 2016 January 2,
2016 December 31, 2016 January
2, 2016 Revenue: Merchandise sales $ 1,195,998 $
1,279,198 $ 3,558,019 $ 3,481,375 Financial Services revenue
132,671 131,054 543,061 502,543 Other revenue 9,636 (2,425 )
28,279 13,784 Total revenue 1,338,305
1,407,827 4,129,359 3,997,702 Cost of revenue:
Merchandise costs (exclusive of depreciation and amortization)
811,432 852,847 2,413,850 2,286,554 Cost of other revenue 6,391
158 13,135 378 Total cost of revenue
(exclusive of depreciation and amortization) 817,823 853,005
2,426,985 2,286,932 Selling,
distribution, and administrative expenses 399,101 418,154 1,414,312
1,387,647 Impairment and restructuring charges 8,737 9,744
14,122 15,331 Operating income 112,644
126,924 273,940 307,792 Interest expense, net (7,913 )
(8,179 ) (31,481 ) (22,882 ) Other non-operating income, net 580
4,532 5,141 9,717 Income before
provision for income taxes 105,311 123,277 247,600 294,627
Provision for income taxes 47,252 44,486 100,653
105,297 Net income $ 58,059 $ 78,791 $
146,947 $ 189,330 Earnings per basic share $
0.85 $ 1.15 $ 2.15 $ 2.70 Earnings per
diluted share $ 0.84 $ 1.14 $ 2.13 $ 2.67
Basic weighted average shares outstanding 68,486,771
68,570,043 68,323,540 70,102,715
Diluted weighted average shares outstanding 69,300,123
69,127,372 68,996,664 70,968,913
CABELA’S INCORPORATED AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (Dollars in Thousands Except Par Values)
(Unaudited) December 31, 2016
January 2, 2016 ASSETS CURRENT Cash and cash
equivalents $ 263,825 $ 315,066 Restricted cash of the Trust 48,697
40,983 Accounts receivable, net 76,140 79,330
Credit card loans (includes restricted
credit card loans of the Trust of $5,661,101 and $5,066,660),
net of allowance for loan losses of
$118,343 and $75,911
5,579,575 5,035,267 Inventories 860,360 819,271 Prepaid expenses
and other current assets 132,250 117,330 Income taxes receivable
75,731 77,698 Total current assets 7,036,578
6,484,945 Property and equipment, net 1,807,209 1,811,302 Deferred
income taxes — 28,042 Other assets 127,037 138,715
Total assets $ 8,970,824 $ 8,463,004
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT Accounts
payable, including unpresented checks of $41,132 and $23,580 $
347,784 $ 281,985 Gift instruments, credit card rewards, and
loyalty rewards programs 387,865 365,427 Accrued expenses and other
liabilities 172,744 224,733 Time deposits 177,015 215,306 Current
maturities of secured variable funding obligations of the Trust
420,000 655,000 Current maturities of secured long-term obligations
of the Trust, net 1,104,685 509,673 Current maturities of long-term
debt 79,677 223,452 Total current liabilities
2,689,770 2,475,576 Long-term time deposits 991,842 664,593 Secured
long-term obligations of the Trust, less current maturities, net
2,466,576 2,721,259 Long-term debt, less current maturities, net
671,509 635,898 Deferred income taxes 7,288 — Other long-term
liabilities 132,240 137,035 COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY Preferred stock, $0.01 par value;
Authorized – 10,000,000 shares; Issued – none — — Common stock,
$0.01 par value: Class A Voting, Authorized – 245,000,000 shares
Issued – 71,595,020 and 71,595,020 shares Outstanding – 68,502,256
and 67,818,715 shares 716 716 Additional paid-in capital 384,353
389,754 Retained earnings 1,798,809 1,651,862 Accumulated other
comprehensive loss (45,922 ) (50,914 ) Treasury stock, at cost –
3,092,764 and 3,776,305 shares (126,357 ) (162,775 ) Total
stockholders’ equity 2,011,599 1,828,643 Total
liabilities and stockholders’ equity $ 8,970,824 $ 8,463,004
CABELA’S INCORPORATED AND SUBSIDIARIES
SELECTED FINANCIAL DATA (Dollars in Thousands)
(Unaudited) Three
Months Ended Fiscal Year Ended December 31,
2016 January 2, 2016 December 31,
2016 January 2, 2016
Components of Total
Consolidated Revenue:
Merchandise sales $ 1,195,998 $ 1,279,198 $ 3,558,019 $ 3,481,375
Financial Services revenue 132,671 131,054 543,061 502,543 Other
revenue 9,636 (2,425 ) 28,279 13,784 Total
consolidated revenue as reported $ 1,338,305 $ 1,407,827
$ 4,129,359 $ 3,997,702
As a Percentage of
Total Consolidated Revenue:
Merchandise sales 89.4 % 90.9 % 86.2 % 87.1 % Financial Services
revenue 9.9 9.3 13.1 12.6 Other revenue 0.7 (0.2 ) 0.7
0.3 Total 100.0 % 100.0 % 100.0 % 100.0 %
Operating Income by
Segment:
Merchandising $ 69,500 $ 88,826 $ 73,494 $ 134,804 Financial
Services 43,144 38,098 200,446 172,988
Total consolidated operating income as reported $ 112,644 $
126,924 $ 273,940 $ 307,792
Operating Income by
Segment as a Percentage of Segment Revenue:
Merchandising segment operating income 5.8 % 7.0 % 2.0 % 3.9 %
Financial Services segment operating income 34.0 30.3 38.4 35.9
Total operating income as a percentage of total revenue 8.4 9.0 6.6
7.7
CABELA’S INCORPORATED AND SUBSIDIARIES
COMPONENTS OF FINANCIAL SERVICES REVENUE (Dollars in
Thousands) (Unaudited)
Financial Services revenue consists of activity from the
Company’s credit card operations and is comprised of interest and
fee income, interchange income, other non-interest income, interest
expense, provision for loan losses, and customer rewards costs. The
following table details the components and amounts of Financial
Services revenue as reported for the periods presented below.
Three Months Ended Fiscal Year
Ended December 31, 2016 January 2,
2016 December 31, 2016 January
2, 2016 Interest and fee income $ 161,438 $
131,898 $ 597,709 $ 481,731 Interest expense (24,097 ) (18,199 )
(88,177 ) (68,827 ) Provision for loan losses (48,655 ) (27,907 )
(147,661 ) (85,120 ) Net interest income, net of provision for loan
losses 88,686 85,792 361,871 327,784
Non-interest income: Interchange income 106,505 106,585 410,718
394,037 Other non-interest income 790 661 3,333
2,990 Total non-interest income 107,295 107,246
414,051 397,027 Less: Customer rewards costs (63,310 ) (61,984 )
(232,861 ) (222,268 ) Financial Services revenue as reported $
132,671 $ 131,054 $ 543,061 $ 502,543
The following table sets forth the components of Financial
Services revenue as reported as a percentage of average total
credit card loans, including any accrued interest and fees, for the
periods presented below.
Three Months Ended Fiscal Year
Ended December 31, 2016 January 2,
2016 December 31, 2016 January
2, 2016 Interest and fee income 12.0% 11.1% 11.6%
10.8% Interest expense (1.8) (1.5) (1.7) (1.5) Provision for loan
losses (3.6) (2.3) (2.9) (1.9) Interchange income 7.9 8.9 8.0 8.8
Other non-interest income — — 0.1 0.1 Customer rewards costs (4.7)
(5.2) (4.5) (5.0) Financial Services revenue as reported 9.8% 11.0%
10.6% 11.3%
CABELA’S INCORPORATED AND
SUBSIDIARIES KEY STATISTICS OF FINANCIAL SERVICES
BUSINESS (Unaudited)
The following tables show key statistics reflecting the
performance of the Financial Services business for the periods
presented below.
Three Months Ended December
31, 2016 January 2, 2016
Increase (Decrease)
% Change (Dollars in Thousands Except Average Balance per
Active Account ) Average balance of credit card loans
(1) $ 5,398,495 $ 4,763,351 $ 635,144 13.3 % Average number of
active credit card accounts 2,118,659 2,032,492 86,167 4.2 Average
balance per active credit card account (1) $ 2,548 $ 2,344 $ 204
8.7 Purchases on credit card accounts, net 5,592,040 5,463,292
128,748 2.4 Net charge-offs on credit card loans (1) 37,643 20,958
16,685 79.6
Net charge-offs as a percentage of
averagecredit card loans (1)
2.79 % 1.76 % 1.03 % (1)
Includes accrued interest and fees
Fiscal Year Ended December 31, 2016
January 2, 2016
Increase(Decrease)
% Change (Dollars in Thousands Except Average Balance per
Active Account ) Average balance of credit card loans
(1) $ 5,120,592 $ 4,465,058 $ 655,534 14.7 % Average number of
active credit card accounts 2,064,517 1,940,534 123,983 6.4 Average
balance per active credit card account (1) $ 2,480 $ 2,301 $ 179
7.8 Purchases on credit card accounts, net 21,266,315 20,213,403
1,052,912 5.2 Net charge-offs on credit card loans (1) 120,497
75,846 44,651 58.9
Net charge-offs as a percentage of
averagecredit card loans (1)
2.35 % 1.70 % 0.65 % (1)
Includes accrued interest and fees
CABELA’S
INCORPORATED AND SUBSIDIARIES REVENUE IN FISCAL YEAR 2016
(52 WEEKS) COMPARED TO FISCAL YEAR 2015 (53 WEEKS) (Dollars
in Thousands) (Unaudited)
Information on the extra week in the fourth fiscal quarter of
2015 and fiscal year ended January 2, 2016, is presented below in
order to separate the impact of the extra week on reported results
in comparison to reported results for the fourth fiscal quarter of
2016 and fiscal year ended December 31, 2016. Financial Services
was not adjusted because its reporting periods end on a calendar
year. Management believes that these measures are an important
analytical tool to aid in understanding operating trends without
the 53rd week in fiscal year 2015.
Three Months Ended
Excluding 53rd Week of 2015 (Non-GAAP Basis)
December 31, 2016
January 2, 2016(including
53rdweek)
Increase(Decrease)
%Change
Week 53
Increase(Decrease)
%Change
Revenue: Merchandise sales $ 1,195,998 $ 1,279,198 $ (83,200
) (6.5 )% $ 83,085 $ (115 ) — % Financial Services 132,671 131,054
1,617 1.2 — 1,617 1.2 Other revenue 9,636 (2,425 ) 12,061
900 12,961 Total revenue $ 1,338,305 $
1,407,827 $ (69,522 ) (4.9 ) $ 83,985 14,463
1.0
Fiscal Year Ended
Excluding 53rd Week of 2015 (Non-GAAP
Basis)
December 31, 2016
January 2, 2016(including
53rdweek)
Increase(Decrease)
%Change
Week 53
Increase(Decrease)
%Change
Revenue: Merchandise sales $ 3,558,019 $ 3,481,375 $ 76,644
2.2 % $ 83,085 $ 159,729 4.6 % Financial Services 543,061 502,543
40,518 8.1 — 40,518 8.1 Other revenue 28,279 13,784
14,495 900 15,395 Total revenue $ 4,129,359
$ 3,997,702 $ 131,657 3.3 $ 83,985 $
215,642 5.4
CABELA’S INCORPORATED AND
SUBSIDIARIES RECONCILIATION OF GAAP REPORTED TO NON-GAAP
ADJUSTED FINANCIAL MEASURES (1) (Unaudited)
To supplement our consolidated statements of income presented in
accordance with generally accepted accounting principles (“GAAP”),
we are providing non-GAAP adjusted financial measures of operating
results that exclude certain items. Total revenue; selling,
distribution, and administrative expenses; impairment and
restructuring charges; operating income; income before provision
for income taxes; provision for income taxes; net income; and
earnings per diluted share are presented below both as GAAP
reported and non-GAAP financial measures excluding (i) the gain on
sale and related basis of a property sold in the fourth quarter of
2016; (ii) consulting fees and certain expenses primarily related
to our corporate restructuring initiative and review of strategic
alternatives; (iii) a charge recognized pursuant to a lawsuit
settlement; (iv) impairment and restructuring charges; (v) receipt
on a note receivable balance previously written off; (vi) a penalty
associated with the Company’s settlement with the SEC; (vii)
incremental expenses related to the transition and closing of the
Company’s distribution center in Canada; and (viii) an adjustment
to the provision for income taxes for nondeductible expenses
primarily to facilitate the acquisition of the Company. In light of
the nature and magnitude, we believe these items should be
presented separately to enhance a reader’s overall understanding of
the Company’s ongoing operations. These non-GAAP adjusted financial
measures should be considered in conjunction with the GAAP
financial measures.
We believe these non-GAAP adjusted financial measures provide
useful supplemental information to investors regarding the
underlying business trends and performance of our ongoing
operations and are useful for year-over-year comparisons of such
operations. In addition, we evaluate results using non-GAAP
adjusted operating income, adjusted net income, and adjusted
earnings per diluted share. These non-GAAP adjusted financial
measures should not be considered in isolation or as a substitute
for operating income, net income, earnings per diluted share, or
any other measure calculated in accordance with GAAP. The following
tables reconcile these financial measures to the related GAAP
adjusted financial measures for the periods presented.
Reconciliation of GAAP Reported to Non-GAAP Adjusted
Financial Measures (1) Three Months Ended December
31, 2016 January 2, 2016
GAAP Basis as Reported
Non-GAAPAdjustments
Non-GAAPAmounts
GAAP Basis as Reported
Non-GAAPAdjustments
Non-GAAPAmounts
(Dollars in Thousands Except Earnings Per Share)
Total revenue (2)
$ 1,338,305 $ (10,000 ) $ 1,328,305
$ 1,407,827 $ — $ 1,407,827 Selling, distribution,
and administrative expenses (3)
$ 399,101 $ (10,117 )
$ 388,984
$ 418,154 $ (2,761 ) $ 415,393 Impairment
and restructuring charges (4)
$ 8,737 $ (8,737 ) $ —
$ 9,744 $ (9,744 ) $ — Operating income (5)
$
112,644 $ 14,492 $ 127,136
$ 126,924 $ 12,505
$ 139,429 Income before provision for income taxes
$
105,311 $ 14,492 $ 119,803
$ 123,277 $ 12,505
$ 135,782 Provision for income taxes (6)
$ 47,252 $
26 $ 47,278
$ 44,486 $ 4,488 $ 48,974 Net income
$ 58,059 $ 14,466 $ 72,525
$ 78,791 $
8,017 $ 86,808 Earnings per diluted share
$
0.84 $ 0.21 $ 1.05
$ 1.14 $ 0.12 $ 1.26
(footnotes follow on the next page)
CABELA’S INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL
MEASURES (Continued) (1) (Unaudited)
Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial
Measures (1) Fiscal Year Ended December 31, 2016
January 2, 2016
GAAP Basisas Reported
Non-GAAPAdjustments
Non-GAAPAmounts
GAAP Basisas Reported
Non-GAAPAdjustments
Non-GAAPAmounts
(Dollars in Thousands Except Earnings Per Share)
Total revenue (2)
$ 4,129,359 $ (10,000 ) $ 4,119,359
$ 3,997,702 $ — $ 3,997,702 Selling, distribution,
and administrative expenses (3)
$ 1,414,312 $ (34,050
) $ 1,380,262
$ 1,387,647 $ (8,626 ) $ 1,379,021
Impairment and restructuring charges (4)
$ 14,122 $
(14,122 ) $ —
$ 15,331 $ (15,331 ) $ — Operating
income (5)
$ 273,940 $ 43,810 $ 317,750
$
307,792 $ 23,957 $ 331,749 Income before provision for
income taxes (7)
$ 247,600 $ 43,333 $ 290,933
$ 294,627 $ 23,957 $ 318,584 Provision for income
taxes (6)
$ 100,653 $ 10,610 $ 111,263
$
105,297 $ 8,553 $ 113,850 Net income
$ 146,947
$ 32,723 $ 179,670
$ 189,330 $ 15,404 $ 204,734
Earnings per diluted share
$ 2.13
$ 0.47 $ 2.60
$
2.67 $ 0.21 $ 2.88 (1)
The presentation includes non-GAAP financial measures. These
non-GAAP financial measures are not prepared under any
comprehensive set of accounting rules or principles, and do not
reflect all of the amounts associated with the Company's results of
operations as determined in accordance with GAAP. (2)
Reflects the selling price, classified in other revenue, of a
property which was sold in 2016. This sale and pre-tax gain on sale
is shown as a non-GAAP item since this property had been impaired
in previous years with the impairment losses shown as a non-GAAP
item. (3) Consists of the following for the respective
periods:
Three Months Ended Fiscal
Year Ended
December 31, 2016
January 2, 2016
December 31, 2016
January 2, 2016
Consulting fees and certain other expenses
primarily relatedto costs associated with the Company’s
corporaterestructuring initiatives incurred in both years and
thereview of strategic alternatives incurred in 2016
$ 10,117 $ 2,761 $ 30,200 $ 6,419
Charge related to a lawsuit settlement
— — 3,850 — Penalty associated with the Company’s settlement with
the SEC — — — 1,000
Incremental expenses related to the
transition and closing ofthe Company’s distribution center in
Canada
— — — 1,207 $ 10,117 $ 2,761 $
34,050 $ 8,626
(footnotes continue on the next page)
CABELA’S INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL
MEASURES (Continued) (1) (Unaudited)
(4) Consists of the following for the respective periods:
Three Months Ended Fiscal Year Ended
December 31, 2016 January 2,
2016 December 31, 2016 January
2, 2016
Charges for employee severance agreements
andtermination benefits related to our corporaterestructuring and
reduction in the number of personnel
$ 6 $ 179 $ 4,003 $ 5,556 Impairment losses on property, equipment,
and other assets 5,583 5,691 6,971 5,901
Write-off of costs pertaining to store
sites previouslyidentified as future retail store locations but
decidednot to develop
896 3,874 896 3,874
Accumulated amortization of deferred grant
incomerelating to fair value adjustments on economicdevelopment
bonds
2,252 — 2,252 — $ 8,737 $ 9,744
$ 14,122 $ 15,331 (5) Reflects adjustments in
notes (2), (3), and (4), and an adjustment of $5,638 to the cost of
other revenue for the cost (basis) of a property which was sold in
2016. (6) For all periods presented, reflects the estimated
provision for income taxes on the non-GAAP adjusted income before
provision for income taxes. In addition, for the three months and
fiscal year ended December 31, 2016, reflects an adjustment of
$5,448 to the provision for income taxes for nondeductible expenses
to facilitate the acquisition of the Company. The effective income
tax rate used for the non-GAAP financial measures was 39.5% and
38.2%, respectively, for the three months and fiscal year ended
December 31, 2016, and 36.1% and 35.7%, respectively, for the three
months and fiscal ended January 2, 2016. A reconciliation impacting
the provision for income taxes follows:
Three
Months Ended Fiscal Year Ended December
31, 2016 January 2, 2016
December 31, 2016 January 2,
2016
Provision for income taxes calculated on
the non-GAAPadjustments excluding the impact of the
nondeductibleexpenses to facilitate the acquisition of the
Company
$ 5,474 $ 4,488 $ 16,058 $ 8,553
Adjustment to the provision for income
taxes fornondeductible expenses to facilitate the acquisition ofthe
Company
(5,448 ) — (5,448 ) — Provision for income taxes on non-GAAP
adjustments $ 26 $ 4,488 $ 10,610 $ 8,553
(7) For the fiscal year ended December 31, 2016,
reflects adjustments in note (5) and an adjustment of $477 to other
non-operating income, net. The adjustment of $477 was for funds
received on a note receivable where the balance was written off in
a previous period and treated as a non-GAAP item.
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Cabela’s IncorporatedInvestors:Andrew Weingardt,
308-255-7428orMedia:Nathan Borowski, 308-255-2861
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